Medicare is a nationwide government health insurance program in the US for people who are:

• Age 65 and older
• Have end stage renal disease (kidney failure)
• Have been receiving Social Security disability payments after two years
• Who have ALS (also called Lou Gehrig’s disease)

Medicare has four parts. 

Part A – Hospital Insurance

• Pays for [but not all] in-patient hospital stays.
• Also pays for up to 100 days (but not all) in a Medicare approved nursing home (skilled nursing facility)
• Pays for skilled care [like care from a licensed professional like a registered nurse, physical or respiratory therapist, etc.] at home.
• Pays for hospice care (terminal illness) within six months of dying.
• Premium free for many Americans if they or their spouse have been working at least ten years or more and paying Medicare taxes.

Part B – Medicare Insurance

• Helps cover medically necessary services like doctor visits, X rays, and lab tests.
• Covers preventive services like cardiac rehabilitation, colorectal cancer screenings, diabetic supplies, flu shots, Glaucoma tests, mammogram screening, smoking cessation/counseling telehealth and home services if not covered by Part A. Covered at no out of pocket expense for these preventive services.
• Part B pays 80% of allowable charges for a coverage service after you meet your Annual Part B deductible [$233 in 2023]. After that you will pay 20% of the Medicare approved amount for your care.
• There is a monthly premium for Part B that is based on your annual income from two years ago. If you file your individual tax return of $97,000 or less in 2021, your monthly Part B premium will be $164.90 in 2023.  If you filed a joint tax return of $194,000 or less, your monthly Part B would also be 164.90 in 2023.  People with higher income levels will pay higher Part B premiums.

Medicare Parts A and B are called “Original Medicare” since they were the original parts in Medicare when it was first enacted in 1965.  A significant advantage of Medicare Parts A and B is the freedom to choose any doctor and hospital in the US that accepts Medicare.  There are no “network” restrictions nor referrals required to see a specialist.  There is also a lifetime late enrollment penalty if you are late to enroll in Medicare Part B.

Medicare Part D – Prescription Drug Plans

Medicare Parts A and B do not permit coverage for prescription drugs outside a hospital setting.  On January 1, 2006 , Medicare Part D began to provide outpatient plans for prescription drugs.  These plans are run by private insurance companies but regulated by Medicare.  If you are enrolled in either Part A or Part B (or both) you are eligible for Part D coverage.

To join a Part D drug plan you need to select a drug plan available in your area and pay a separate monthly premium.  This premium is in addition to the premium you are paying for Part B.  The costs of plan coverage premiums, deductibles and copays will vary according to the drug plan you select.

You can’t postpone enrollment in a Part D plan until you suddenly need help paying for drugs due to a medical condition or injury.  There are designed enrollment periods to sign up for plan coverage.

You may be subject to a lifetime late enrollment penalty if you do not have drug plan coverage through a Part D plan or other credible drug plan coverage like from an employer sponsored group plan coverage for drugs, retiree benefits or the Veteran’s Affairs health program.

Medicare Supplement Plans (also known as Medigap Plans)

These plans are offered today by private insurance companies to pay the out of pocket expenses that are found in Medicare Parts A and B.  For example, Medicare Part A has a deductible of $1,600 (in 2023) for each benefit period that you are in the hospital.  If you are in the hospital between 61 and 90 days, you will pay $400 per day and $800 per day if you are in the hospital 91 to 150 days.  A Medigap insurance plan would pay these out of pocket expenses.  Good news – Medicare Part A will pay the hospital bills for the first 60 days you are there after you pay the $1,600 deductible for each benefit period in 2023.

These plan features have been standardized by the federal government.  For example, Plan A must have the same plan features for all insurance companies in 47 states that offer it.  These plans can only differ on plan premiums and customer service. Shop around! Three states (MA, WI, and MN) have unique Medigap plans.

There are ten of these Medigap plans (labeled A to N) today.  Available plans depend on where you live and what plans the insurance companies wish to offer in your state and county.  These plans do not offer prescription drug coverage.  Drug coverage may be obtained with a Medicare Part D Prescription Plan or enrollment in many Medicare Part C Advantage Plans.  All insurance companies that offer Medigap plans must offer at least the Medigap Supplement Plan A, also known as the Core plan.  There are monthly premiums for these plans.

You must be enrolled in Medicare Parts A and B to join a Medicare Supplemental Plan.

Part C – Medicare Advantage Plans

Medicare Advantage Plans are offered by private insurance companies that are approved by Medicare.  Medicare pays these companies to cover your Medicare benefits.  These plans will provide all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) services plus some additional services like vision, drugs, dental and even gym membership plans.

There are different types of Medicare Advantage plans.  Three of the more popular plans include:

• Health Maintenance Organization (HMO) plans. They are similar to HMO plans that you may have had under age 65.  You can only go to doctors or hospitals in the plans network except in an emergency situation.  You may also need to get a referral from your PCP (Primary Care Provider) to see a specialist.
• Preferred Provider Organization (PPO). In a PPO, you can usually go to a specialist directly without obtaining a referral from your PCP. You may pay less if your doctor or hospital belongs to the plan’s network.  You can also go out of network but will likely face higher out of pocket expenses.
• Special Needs Plans (SNPs) – SNP plans provide specialized health services for specific group of people like those who have both Medicare and Medicaid, live in a nursing home or have certain chronic medical conditions like diabetes, dementia, chronic heart failure or chronic lung conditions.

Many of these Medicare Advantage plans will provide prescription drug coverage so you don’t need a stand-alone Medicare Part D prescription plan.  The monthly premiums for these plans can range from zero dollars (not an error) to approaching $100, depending on the available plans in your community.  To enroll in a Medicare Advantage plans you must be enrolled in both Medicare Parts A and B.  Remember that Medicare Part B does have a monthly premium that is based on your income from two years ago.  You never want to be enrolled in a Medicare Advantage plan and a Medicare Supplement plan at the same time.

Questions to ask before joining a Medicare Advantage Plan

• Will my current doctors accept the Medicare Plan that I am considering to join?
• Which medical specialists, hospitals, skilled nursing facilities (nursing homes) are in the plan’s network?
• What is the annual maximum out of pocket (MOOP) cost for in network care and out of network care?
• Are my drug prescriptions covered under the Plan?
• What costs can I expect to pay for my drug coverage like the monthly premium, plan deductibles, co-payments or other charges?
• If I join this plan, would I also lose my employer or union retiree benefits?
• Can I use my current pharmacy?
• Can I use a mail order service to get my drugs delivered to my home?
• What are the co-payments for stays in the hospital?
• Does the plan cover for the services that Original Medicare (Parts A and B) does not cover like dental, vision, gym membership or discounts for hearing aids?

When are you first eligible to enroll in Medicare?

This is called the Initial Enrollment Period. Three months prior to turning age 65 you can enroll in Medicare, the month you turn age 65 and three months after you turn age 65.  There are also special enrollment periods when you can also enroll in Medicare like when you retire at work after age 65 and you no longer have the employer’s health insurance coverage.

Do I receive Medicare automatically at age 65?

If you are receiving Social Security retirement benefits at age 65, you will be automatically enrolled in Medicare Parts A and B.  If you are working at age 65 and older and covered by an employer group health plan, you can decline Medicare Part B since there is a monthly premium for Medicare Part B.  However, you must enroll yourself for Medicare plan coverage at age 65 or later if you are not receiving Social Security retirement benefits. There are lifetime penalties if you enroll in Medicare outside of your permitted enrollment periods.

How do I enroll in Medicare?

There are three ways to enroll in Medicare. You can go online to SSA.gov website (Social Security Administration’s website) to enroll.  This is the fastest way to enroll in Medicare.  You can also call the Social Security Administration’s toll free phone number at 1.800.772.1213 to enroll.  Or you can visit your local Social Security Administration office to enroll in person.

To learn about Medicare at the Centers of Medicare and Medicaid website, go to www.Medicare.gov.
To enroll in Medicare Part A and B, go to Social Security Administration’s website: www.SSA.gov.